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ANNUAL ACCOUNTS Your Company's annual accounts for the year 1953 certified by Arthur Young & Company, independent public accountants, are presented herewith. Also included in this report are detailed comments regarding these accounts, as well as other matters of interest to the stockholders. RESULTS OF OPERATIONS System operations for 1953 resulted in a net profit of $125,465 as compared to a net loss of $186,921 for the year 1953, an improvement of $312,000. Through intensive effort, non-mail revenues increased by $2.182.000 or 35% over the year 1952, while expenses increased by $1,606,000 or 22%. Total taxes levied for the year 1953 amounted to $153,800 including $43,277 paid to the Federal Government on purchases of gasoline and oil. This tax bill paid by Colonial, a relatively small carrier, is indicative of the sizable contribution which the certificated air carriers have been making to the costs of facilities provided by the United States Government. In addition, Colonial collected for and paid to the Government $820,000 in transportation taxes. It is interesting to note that these transportation taxes alone exceed the Colonial's mail subsidy by $300,000. TRAFFIC Your Company reached an all-time high in 1953 with 418,756 revenue passengers flown over the system as compared with 317,244 in 1952, an increase of 32%. The additional traffic was obtained through an increase of 15% in revenue miles flown. Domestic Routes Domestic traffic totaled 366,863 passengers compared to 279,868 in 1952, a gain of 31%. This increase comes on top of a 15% increase in 1952 over 1951. On the Washington-Montreal route, traffic increased 29%. From 87,459 passengers in 1952 to 113,245 in 1953. In the two years since 1951, this route has shown and increase of 52%. Service to Lancaster, Pa. and Philadelphia, Pa. commenced on June 9, 1953. The introduction of a four-engine two-stop service over this route has made a substantial contribution to its growth. On the highly competitive route between New York and Montreal, traffic increased by 37%, from 94,155 in 1952 to 129,354 in 1953. Experimental night coach service, which was started in September, 1952, accounted for 21,307 passengers in 1953 on the New York-Montreal route. The coach service developed this additional business while our regular services also showed strong growth. The coach service between Washington and Syracuse was discontinued in November, 1953 as the load factors did not justify continuation of this service. Local traffic between New York and the intermediate points on the Montreal route increased by 26% or 25,500 passengers. This gain is particularly significant in view of the past development of traffic in this area.
